[2018] 1 LNS 1945 Legal Network Series

DALAM MAHKAMAH TINGGI MALAYA Di KUALA LUMPUR

DALAM WILAYAH PERSEKUTUAN, MALAYSIA

(BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS)

[PERMOHONAN BAGI SEMAKAN KEHAKIMAN NO:

WA-25-166-07/2018]

Dalam perkara berkenaan dengan

keputusan Menteri Kewangan dalam
surat bertarikh 25 Januari, 2018 yang
diberitahu kepada pemohon pada 16
Mei, 2018;

Dan

Dalam perkara Seksyen 17 Akta

Cukai Barang dan Perkhidmatan,
2014 dan Butiran 3 Jadual Kedua
Kepada Perintah Cukai Barang dan
Perkhidmatan (Pembekalan Berdasar
Sifar), 2014;

Dan

Dalam perkara Perenggan 1 Jadual

kepada Akta Mahkamah Kehakiman,
1964;

Dan

Dalam perkara berkenaan Aturan 53

Kaedah-Kaedah Mahkamah, 2012.

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ANTARA

PENGERANG INDEPENDENT TERMINALS SDN BHD

... PEMOHON

DAN

1. MENTERI KEWANGAN MALAYSIA

2. KETUA PENGARAH KASTAM MALAYSIA
… RESPONDEN-
RESPONDEN

JUDGMENT

Introduction

[1] This is the applicant’s application for leave to commence judicial

review pursuant to Order 53 Rule of the Rules of Court 2012. The
reliefs sought by the applicant are the following :

(i) an order of certiorari to quash the decision of the First

Respondent contained in the letter from the First Respondent
dated 25 January 2018, which was communicated to the
Applicant on 16 May 2018, to direct the Second Respondent
to issue a bill of demand to the Applicant;

(ii) a declaration that the First Respondent has unlawfully

directed the Second Respondent to issue a bill of demand to
the Applicant;

(iii) a declaration that item 3(1) of the Second Schedule of the

Goods and Services Tax (Zero-rated Supply) Order 2014 is
applicable to supplies made by the Applicant;

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(iv) a declaration that the bill of demand amounting to

RM16,505,499.05, covering the period 1 April, 2015 to 31
August, 2016, issued to the Applicant via a letter from the
Second Respondent dated 5 April, 2018 is illegal;

(v) a mandamus to compel the First Respondent to revoke and

withdraw the direction to the Second Respondent to issue a
bill of demand to the Applicant;

(vi) a mandamus to compel the Second Respondent to apply item

3(1) of the Second Schedule of the Goods and Services Tax
(Zero-rated Supply) Order, 2014 to supplies made by the
Applicant;

(vii) a mandamus to compel the First Respondent to direct the

Second Respondent to revoke and withdraw the bill of
demand amounting to RM 16,505,499.05, covering the
period 1 April, 2015 to 31 August, 2016, issued to the
Applicant via a letter from the Second Respondent dated 5
April, 2018;

(viii) a mandamus to compel the Second Respondent to revoke and

withdraw the bill of demand amounting to RM16,505,499.05
covering the period 1 April, 2015 to 31 August 2016, issued
to the Applicant via a letter from the Second Respondent
dated 5 April, 2018;

(ix) a mandamus to compel the First Respondent to direct the

Second Respondent to refund to the Applicant the sum of
RM10,795,191.39 that was set-off from the input tax credit
entitled to the Applicant as part payment for the bill of
demand amounting to RM16,505,499.05, covering the
period 1 April, 2015 to 31 August, 2016, issued to the

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Applicant via a letter from the Second Respondent dated 5

April, 2018, together with:

(a) interest on the sum of RM10,795,191.39 at the rate of

5% per annum from 5 April, 2018 up to the date of
judgment; and

(b) interest of the sum of RM10,795,191.39 and the

amount stated in paragraph 1(i)(i) above at the rate of
5% per annum from the date of judgment up to the date
of full settlement;

(x) a mandamus to compel the Second Respondent to refund to

the Applicant the sum of RM10,795,191.39, that was set-off
from the input tax credit entitled to the Applicant as part
payment for the bill of demand amounting to
RM16,505,499.05, covering the period 1 April 2015 to 31
August 2016, issued to the Applicant via a letter from the
Second Respondent dated 5 April 2018 together with:

(a) interest of the sum of RM10,795,191.39 at the rate of

5% per annum from 5 April 2018 up to the date of
judgment; and

(b) interest on the sum of RM10,795,191.39 and the

amount stated in paragraph 1(i)(i) above at the rate of
5% per annum from the date of judgment up to the date
of full settlement;

(xi) a mandamus to compel the First Respondent and Second

Respondent to take all such lawful actions as may be
expedient or necessary to give effect to, and in accordance
with, the order and/or reliefs given or made by this
Honourable Court;

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(xii) a prohibitory order to stop the Second Respondent from

taking any legal actions or proceedings against the
Applicant and/or its directors pursuant to the decision of the
First Respondent in the letter dated 25 January 2018 and
pursuant to the bill of demand amounting to RM
16,505,499.05, covering the period 1 April 2015 to 31
August 2016, issued to the Applicant via a letter from the
Second Respondent dated 5 April 2018.

The Brief Facts

[2] The relevant facts in this case are the following :

(i) the applicant operates an independant storage terminal for

oil traders/oil majors at Pengerang Deepwater Terminal
which is located in Pengerang, Kota Tinggi, Johor.

(ii) the applicant is also a registered person under the Goods and
Services Tax Act 2014 (‘GST Act 2014’) with effect from
1.4.2015.

(iii) On 8.9.2016, the Compliance Division of Johor Royal

Malaysian Customs Department conducted a goods and
service tax audit of the Applicant for the period of 1.4.2015
to 31.8.2016.

(iv) the findings of the audit made reveals that there is underpaid
of tax by the Applicant and as such is in breached of section
88 of the GST Act 2014.

(v) Consequently, on 5.4.2018, the 2 nd respondent issued a bill

of demand in the sum of RM16,505,499.05 against the
applicant for the said period of 1.4.2015 to 31.8.2016.

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(vi) Dissatisfied with the issuance of the said bill of demand, the
Applicant filed this application for judicial review.

Preliminary Objection For Leave Application

[3] The Federal Counsel of the Attorney General Chambers who

represents the respondents in this case, during the application for
leave raised an objection that the applicant’s application is
frivolous and vexatious and this court has no jurisdiction to hear
the said application.

[4] The grounds for the objection made inter alia are as follows :

(i) the applicant has not exhausted the statutory appeal

procedure under the GST Act 2014 before filing the
application for judicial review.

(ii) the subject matter for review prayed for under paragraph 1
(a) of enclosure which is the decision of the 1 st respondent
contained in the letter dated 25.1.2018 to direct the 2 nd
respondent to issue a bill of demand to the applicant, is not
exibited in the affidavit in support of the application.

The Findings of the Court

[5] It is trite law that leave to commence judicial review may be

granted if the application is not frivolous or vexations and the
applicant has an arguable case.

[6] The Federal Court in WRP Asia Pacific Sdn Bhd v. Tenaga
Nasional Bhd [2012] 4 MLJ 296, [2012] 4 CLJ 478 explained the
test for leave to commence a judicial review in the following
words :

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“Leave may be granted if the leave application is not

thought of as frivolous, and if leave is granted, an arguable
case of granting the reliefs sought at the substantive hearing
may be the resultant outcome. A rider must be attached to
the application though, i.e., unless the matter for judicial
review is amenable to judicial review no success may be
envisaged.”

[7] This test was followed by a recent case of the Court of Appeal in
Peguam Negara Malaysia v. Nurul Izzah bt Anwar [2017] 5 CLJ
595, where it states :

“[23] The law in the subject is well-settled and the authority

on which the appellant principally relies in considering the
test for granting leave is the pronouncement of the Federal
Court in the case of WRP Asia Pacific Sdn Bhd v. Tenaga
Nasional Berhad [2012] 4 CLJ 478 in which the applicable
test was stated in para 12 at p.488 in the following terms :

„...At the leave stage, on a quick perusal of the

material available, if the court thinks that
subsequently at the substantive hearing stage an
arguable case may be disclosed, and the relief sought
may be granted, leave should be granted... Without the
need to go into depth of the abundant authorities,
suffice if we state that leave may be granted if the leave
appiicantion is not thought of a frivolous, and if leave
is granted, an arguable case in favour of granting the
relif sought at the substantive hearing may be the
resultant outcome... „

We would also refer to the case of Tuan Hj Sarip Hamid &

Anor v. Patco Malaysia Bhd [1995] 3 CLJ 627 [TAB 4] His
Lordship Edgar Joseph Jr. FCJ wherein in Supreme Court

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approved the following guidelines stated in R. v. Secretary

of State for the Home Department, ex parte Rukshanda
begum [1990] Crown Office Digest 109, Dip, the Court of
Appeal in England correctly laid down guidelines to be
followed by the Court when considering an application for
leave, in the following terms :

(i) The Judge should grant leave if it is clear that is a

point for further investigation on a full inter partes
basis with all such evidence as is necessary on the
facts and all such argument as is necessary on the law.

(ii) If the Judge is satisfied that there is no arguable case

be should dismiss the application for leave to move for
judicial review.

(Hi) If on considering the papers, the Judge comes to the

conclusion that he really does not know whether there
is or is not an arguable case, the right course is for the
Judge to invite the putative respondent to attend and
make representations as to whether of not leave should
be granted. That inter partes leave hearing should not
be anywhere near so extentive as a full substantive
judicial review hearing. The test to be applied by the
Judge at that inter partes leave hearing should be
analogous to the approach adopted in deciding
whether to grant leave to appeal against an
arbitrator‟s award……namely; if, taking account of a
brief for further consideration, then he should grant
leave.”

[8] Reverting to the present application, the crux of the applicant

dissatisfaction is with regard to the bill of demand dated 5,4.2018

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in the sum of RM16,505,499.05 issued to the applicant by the

Director General of Customs (‘the 2 nd respondent’).

[9] In this regard, subsection 43(8) of GST Act 2014 empowers the
2 nd respondent to issue the said bill of demand where the provision
provides :

“Power to assess

(8) Where an amount has been assessed and notified

to any person under subsection (1), 92), (5) or(7), it
shall be deemed to be an amount of tax due and
payable from him and may be recovered accordingly
and the amount of tax aqnd enalty, if any, shall be paid
by the person, whether or not that person appeals
against the assessment, to the Director General
unless or except to the extent that the assessment has
been withdrawn or reduced. ”

[10] Although the Goods and Services Tax Act 2014 has been repealed,
section 4 of the Goods and Services Tax (Repeal) Act 2018
provides inter-alia where there involves any under paid services
tax, it can be collected under the repeal act.

Section 4 states :

“4. (1) Notwithstanding the repeal of the Goods and

Services Act 2014-

(a) any liability incurred may be enforced; or

(b) any goods and services tax due, overpaid or

erroneously paid may be collected refunded or
remitted, under the repealed Act as if the
repealed Act had not been repealed.

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(2) Notwithstanding the repeal of the Goods and

Services Act 2014, section 178, 181 and 191 of the
repealed Act continue to remain in operation after the
appointed date.”

[11] This rights under the repealed law must also includes the right to
appeal against the decision of the Director General under sections
126 and 127 of the Goods and Services Tax Act 2014.

[12] For ease of reference, the said provisions are as follows :

(i) Section 126

“Right of appeal

126. (1) Subject to section 127, any person aggrieved by the

decision of the Director General may appeal against the
decision.

(2) The appeal shall be made to the Tribunal within thirty

days from the date the disputed decision was made known to
the aggrieved person or within any such extension of time
that may be granted by the Tribunal in the prescribed
manner together with the prescribed fee.”

(ii) Section 127

“ Jurisdiction of Tribunal

127. (1) The Tribunal shall have jurisdiction to determine

appeals relating to goods and services tax axcept on matters
specified in the Fourth Schedule.

(2) The Minister may, by order published in the Gazette,

amend the Fourth Schedule.

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(3) Any order made under subsection (2) shall be laid

before the Dewan Rakyat."

[13] As regards the present application, it does not falls under any
matters specified in the Fourth Schedule and as such is within the
jurisdiction of the Tribunal.

[14] Further, subsection 5(3) of the Goods and Services Tax (Repeal)
Act 2018 empowers the Customs Appeal Tribunal to hear the
applicant’s appeal. It provides :

“5. (3) Any appeal before the Goods and Services Tax
Appeal Tribunal which is pending immediately before the
appointed date shall, on or after the appointed date,
continue to be heard and decided by the Customs Appeal
Tribunal.”

[15] Therefore, the statutory procedure, in particular section 126 of the

Goods and Services Tax Act 2014, requires the applicant to appeal
to the Customs Appeal Tribunal if dissatisfied or aggrieved by the
decision of the Director General in issuing the bill of demand
dated 5.4.2018.

[16] However, the applicant has failed to exhaust this remedy to appeal
to the Custom Appeal Tribunal but instead has filed an application
for judicial review before this court.

[17] On the issue of exhausting the statutory rights under a specific

law, it is instructive to make reference to the relevant apex court’s
decision.

[18] In the case of Robin Tan Peng Heng @ Muhamad Rizal bin
Abduilah (suing as public officer at Penang Turf Club) v. Ketua
Pengarah Kesatuan Keserja Malaysia & Anor [2011] 2 MLJ 457,
it states :

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“[16] The second question could better be described as a

consequence of the first question. Section 71A has provided
a remedial mechanism within the framework of the trade
union legislation, that is a specific procedure whereby an
appeal lies to the Minister. The second question relates to
another matter, that is since s. 71A(1) is applicable to an
employer does it still permit the employer to have an option
not to appeal, and additionally, instead have recourse to a
court of law in order to challenge the registration. The
declaratory orders sought by the appellant would have the
effect of negating the decision of the first respondent. By
praying for the declaratory orders the appellant is in effect
appealing against the decision of the first res pondent while
a specific procedure has been lain down in the Act 262. By
statue a second tier has been established whereby an
appeal lies to the Minister. The word used in s. 71A(1)(b) is
„may‟. In construing the word „may‟ generally, it could be
contended that the word is permissive in relation to the
person who is given the right to appeal in the sense that is
gives the person a choice to prefer an appeal against the
decision of the registrar or not to. But in relation to the
person who is to be affected by the appeal we do not see this
as directory. The declaratory orders sought seen to reverse
the decision of the registrar. Hence is that sense if an
employer wishes to refute recognition then it is the
mandatory procedure that is laid down that has to be
resorted to for the legislation has identified the specific
procedure whereby any person who is dissatisfied is to seek
further recourse with the Minister if that person wishes to
negate the decision of the registrar.

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[17] In our opinion the legislation by stipulating that the

decision of the Minister is to be final is itself indicative
that when there is alreadystipulated a second tier identified
in the legislation, courts are not authorised to interfere for
the statutory right that has accured is not purely formal but
mandatory. In other words the statutory right has to be
exhausted. „„

[19] In another decision by the Federal Court in Ketua Pengarah Hasil

Dalam Negeri v. Alcatel-Lucent Malaysia Sdn Bhd & Anor [2017]
1 MLJ 563, it was explained clearly in the following words :

“[58] To dispel any fear of a taxpayer, merely because he

has to face such an awesome body in the form of the
government, Gill FJ in Sun Man Tobacco Co. v. Government
of Malaysia [1973] 2 MLJ 163 had occasion to state:

The doors of justice are not shut do him merely because its
claiman is the Government, but he has to enter the doors of
the Special Commissioners first to raise the plea of
non-observance of the principle of natural justice or
toestablish that the Director-General acted arbitrarily and
in a nonjudicial maner. It is only after he has availed
himself of that remedy as laid down by the law that he has
a right to come to the courts. (Emphasis added.)

[59] The respondents when asked about the failure, replied

that the issue of withholding tax is not an assessment, hence
the irrelevancy of s. 99 in this appeal.”

[20] Apart from the abovementioned cases, the Court of Appeal in

Pengarah Kastam Negeri Johor v. Kedai Makan Kebun Teh
(Sutera Utama) Sdn Bhd & Ors and another appeal [2014] 3 CLJ
733 had this to say on this issue :

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“[18] Having perused that provision, we would agree with

learned SFC that such recourse could only be had after
therespondent taxpayer had exhausted the available remedy
as provided for by Parliament within the four corners of the
Sales Tax Act 1972. That would necessarily mean that the
respondent taxpayer must have exhausted its appeal
remedy with the Director-General of Customs in respect of
the impugned notice as envisaged under s. 68 of the Sales
Tax Act 1972 (supra). While s. 141N seems to suggest that
the aggrieved party go to the High Court, it does not
expressly say that the aggrieved taxpayer may do so
without first exhausting its remedy by appealing to the
Director- General”

[21] In any event, as judicial review is the discretion of the court, the
application for leave to commence judicial review can be allowed
in an exceptional circumstances as explained by the Supreme
Court in Government of Malaysia & Anor v. Jagdis Singh [1987] 2
MLJ 185, which held :

“Held, allowing the appeal: (1) the discretion is still

with the courts to act by way of judicial review but where
there is an appeal provision avilabe to the applicant,
certiorari should not normally issue unless there is shown a
clear lack of jurisdiction or a blantant failure to perform
some statutory duty or in appropriate cases a serious breach
of the principles of natural justice;”

[22] In the present application, the issuance of the bill of demand by

the respondent was made pursuant to subsection 43(8) of the GST
2014 and there is nothing before this court to show failure by the
respondent to perform any statutory duty nor any serious breach of
principles of natural justice. As such, there is no exceptional or

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special circumstances for the court to exercise its discretion to

allow the applicant’s leave application when the applicant has not
exhausted the remedy under the section 126 of GST Act 2014 to
appeal to Custom Appeal Tribunal.

[23] The next pertinent issue in this application is with regard to prayer
1(a), where the applicant sought to quash the decision of the 1 st
respondent in a letter dated 25.1.2018 instructing the 2 nd
respondent to issue the bill of demand to the applicant.

[24] The said letter dated 25.1.2018 by the 1 st respondent was not
exhibited in the applicant’s affidavit-in-support. As such, the
material document which is the basis of the relief sought by the
applicant in prayer 1(a) and pertinent for this court to consider
whether to quash the said decision, is not before the court.

[25] On this issue, it is relevant to make reference to the Federal Court

case, Tuan Haji Sarip & Anor v. Patco Malaysia berhad [1995] 3
CLJ 627 which states the following :

“[1] Any application under O. 53 r. 1(2) must be drafted in

such a way as to ensure that it contains all or substantial
particulars of the facts and matters on which the applicant
intends to rely in support of his application. The affidavit
in support thereof must also be sufficiently detailed and
comprehensive and must exhibit all the relevant
documentary exhibits. The contents of the affidavit here
left much to be desired so much so that there was
insufficient material for the Judge below to have granted
leave.”

At page 631-

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“Having said that, we would add that it is a counsel of

prudence for a lawyer drafting his application under O. 53 r.
1(2) to ensure that it contains substantial particulars of the
facts and matters on which he intends to rely in support of
his applicantion...He should also ensure that his affidavit
in support of his application is as detailed and
comprehensive as the circumstances will permit, and it
should exhibit all documentary exhibits which are truly
relevant and upon which he intends to rely. The object of
these steps in to ensure that the Court has as complete a
picture as is possible right from the start, of the case for the
applicant who is seeking judicial review ”

Conclusion

[26] In view of the foregoing reasons, I find the applicant’s application

for leave to commence judicial review is frivolous and vexatious.
As such, the application is dismissed with costs of RM1,000.00.

Dated: 29 OCTOBER 2018

(NORDIN HASSAN)
Judge
High Court Special And Appellate Powers
Kuala Lumpur High Court.

COUNSEL:

For the applicant - Vijey M Krishnan & Willian Wong; M/s Raja, Darryl
& Loh
Advocates & Solicitors

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Tingkat 26, Menara Hong Leong

No. 6, Jalan Damanlela
Bukit Damansara
50490 Kuala Lumpur
For the respondents - Krishna Priya, Federal Counsel; Jabatan Peguam
Negara
Bahagian Guaman
No. 45, Persiaran Perdana
Presint 4 Putrajaya.

Case(s) referred to:

WRP Asia Pacific Sdn Bhd v. Tenaga Nasional Bhd [2012] 4 MLJ 296,
[2012] 4 CLJ 478

Peguam Negara Malaysia v. Nurul Izzah bt Anwar [2017] 5 CLJ 595

Robin Tan Peng Heng @ Muhamad Rizal bin Abduilah (suing as public
officer at Penang Turf Club) v. Ketua Pengarah Kesatuan Keserja
Malaysia & Anor [2011] 2 MLJ 457

Ketua Pengarah Hasil Dalam Negeri v. Alcatel -Lucent Malaysia Sdn

Bhd & Anor [2017] 1 MLJ 563

Pengarah Kastam Negeri Johor v. Kedai Makan Kebun Teh (Sutera

Utama) Sdn Bhd & Ors and another appeal [2014] 3 CLJ 733

Government of Malaysia & Anor v. Jagdis Singh [1987] 2 MLJ 185

Tuan Haji Sarip & Anor v. Patco Malaysia berhad [1995] 3 CLJ 627

Legislation referred to:

Goods and Services Tax Act 2014, ss. 126, 127, Fourth Schedule

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Goods and Services Tax (Repeal) Act 2018, s. 4

Rules of Court 2012, O. 53

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